How many copies does a game have to be sold for it to considered successful?

[Reasonable]

cAPSLOCK said:

twesterm said:

Found my notes.  First off, we have to assume that successful games are generally extremely polished and HQ.  For this, we're making a modest game with a modest budget with a modest team.

• People
  
  • 20 people x $50k/year (our AVG) x 1.5 years (extremely conservative) = $1.5 million on salary
•  Equipment
  
  • 20 x $15k (consoledev kit, PC, ect) = about $0.3 million
• Overhead
  • salary * 50% = $0.75 million

So that's about $2.5 million for a modest game with a modest team, but do remember we're cutting corners everywhere here.  Now for the next part.

• Cost of goods (remember, these are special CD's and DVD's)
  
  • CD's: $1.00
  •  DVD's: $2-4
  • Game Disk$12-15
  • 200,000 (copies) SKU x $15 = $3million
• Marketing
  • $0.5million
  • typically $2-10 million
  • MDF (marketing development funds) 6% of the wholesale price

So that's about $7million to make a game while cutting every corner possible.  Knowing what I said above about successful games are exremely polished and HQ, this game likely isn't but lets go on and pretend it is.

Assume our game is being sold at a $40 price point and we make $15 on every game, we would have to sell 470,000 copies to break even.

Assume our game is being sold at a $50 price point and we make a $25 profit on every game, we would have to sell 280,000 to break even.

 

So yeah, that's a very modest example, but it's a good place to start when trying to figure out why games are so expensive and why some things are priced the way they are. 

 

Thanks for the info Twesterm! Any idea what kind of difference there would be between Wii and PS3 and 360 games? 

Also, if the Wii is much less espensive to develop for, why do 3rd parties avoid it like the plague?

Also, would it be cheaper to make a game with cut corners on a PS3/360 than to make a top-end Wii game?

3rd parties I believe avoid the Wii for a variety of reasons.

• Some are only really focused on titles that Wii technically isn't best suited for, particularly the PC developers no on console like Epic, Infinity Ward, etc.  There focus is big budget AAA FPS and the like and the Wii clearly doesn't appeal for them (although of course they're happy for other developers to be signed up to create Wii versions as we've seen with CoD4, etc).
• Some clearly worry that only Nintendo titles sell well on Wii and don't want to compete with Mario, Zelda, etc.
• Others clearly see the genre of the game as not selling well on Wii vs say 360 or PS3

The short answer is just because it's cheaper to develop for doesn't automatically mean it's the better option.  Spending $5 Million to put a game on Wii that underperforms and only breaks even or makes a loss is a bad decision next to spending $10 Million to put a game on 360/PS3 and make a modest profit.

Personally, because I have a Wii, I'd like to see more 3rd party titles on it, but I can understand the valid reasons why some avoid it.  Others of course, such as Ubi with their Raving Rabbit stuff, seem to have embraced the Wii pretty well.

What will be interesting is if the Wand/Natal take of reasonably well it could open up an easier option for developers to put a modest, motion control orientated game on all 3 platforms, which would make the market very interesting IMHO.

Oh, and thanks for those numbers Twest - very interesting.

I'd guess looking at other examples in the marketplace such as Uncharted 2, that a modest 360/PS3 game is going to be minimum $ 10 million in cost to be reasonably polished, with bigger titles in the $15 to $20 million range and of course the big boys potentially way north of that - Uncharted 2 for example had a development budget of $20 million so total cost could easily be in the $30 to $40 million mark.

Assuming 2M unit sales at average price WW of $45 you have revenue of $90 million.  I'd guess Uncharted 2 would be unlucky not to finish with at least 2.5 M units so it should generate over $100 M in revenue easy - the big question then is how the $60 to $70 million left from an assumed cost of $30 to $40 million is split for a title like that?